TMG The Mortgage Group Canada Inc.
Navigating Divorce - What Are Your Options?
Separation and divorce can impact a family on many levels, including financially. If you happen to be going through a separation or divorce, homeownership decisions can feel complicated and overwhelming. I can help both parties to preserve their hard-earned home and property investments. If you are in the process of separating or have done so already, but are unsure of the next steps or options regarding your current home and mortgage, please reach out to me. You can find an online guide to navigating the separation of property during divorce for BC here.
Many couples end up selling the marital home to pull out their equity, or because they assume they won’t be able to afford to keep the house on their own. However, if one spouse prefers to stay in the home, there is a mortgage product that is specifically designed for this purpose. It allows you to refinance your property in order to buyout your ex-spouse. This is called a Spousal Buyout Mortgage. With mortgage refinancing, typically you can only refinance up to 80% of the equity available. However, if it is due to a marital breakdown, it is possible to structure a new mortgage that allows you to “purchase” the property from your ex-spouse for up to 95% of the property's value. This option can create some stability for the family during this often-trying time.
As with any mortgage, there are some lender requirements that must be met in order to use this program:
The purchasing spouse must re-qualify to carry the loan individually and a full appraisal will be necessary. To determine this, I
take a full application with you and review your affordability options based on
current lending guidelines. If we decide to proceed, I assist with
ordering the appraisal once we have a lender approval in place
A finalized separation agreement is required, as is a purchase agreement between the two parties. The separation
agreement doesn’t necessarily need to be prepared by a lawyer, nor does a
realtor need to be involved for the purchase agreement. I can provide you
with further information on these processes during your application
Net proceeds can only be used to buy out the other owner's share of equity and/or to pay off joint debt as explicitly agreed upon in the finalized separation agreement
The property must have been and remain your primary residence
If you are in the process of separating or have done so already, but are unsure of the next steps or options regarding your current home and mortgage, please do reach out. I have worked in the mortgage industry for over 12
years, but even with my professional knowledge on this process, I understand
personally how stressful and confusing this situation can be. I am
committed to helping others going through this know exactly what options are
available to them, and I will take the time to provide you with all the information you need to make the best decision for you and your family to move forward. Be assured that our communication will be held in the strictest of confidence.